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Charter innovation

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[Editor’s note: This is the second of two stories on charter school funding.]

By Ret Boney

Charter schools in North Carolina receive roughly the same per-pupil funding as public schools, but get no money for buildings, creating a gap that has forced most charter schools to scrimp and save, or look for innovative solutions such as forming a foundation or having board members personally guarantee loans.

Charter schools, which educated almost 22,000 North Carolina students last year, generally do not have fundraising offices or fundraising professionals on staff, and must cut corners to cover rental costs, often operating out of church basements, storefronts or modular units.

Some, however, are able to save enough to move into more suitable settings, or look for creative ways to build or purchase their own buildings.

Raleigh Charter High School, which was started in 1999 and has about 500 students in grades nine through 12, was able to lease a 10,000-square-foot abandoned textile mill near downtown by making some hard decisions.

The school chose not to join the state retirement system or offer a dental plan, and has fewer educational resources, such as technology and textbooks, than it would like, says Thomas Humble, principal.

“We don’t think our programming is negatively affected, but we could do other things if we had that money,” he says of the 17 percent to 18 percent of the school’s budget used for rent.

The Academy of Moore County, which serves about 75 students, established a foundation to benefit the school by funding facilities and higher-education scholarships for graduates.

“Because of my background in business, I knew there should be an endowment,” says Jack Moyer, the school’s principal until last month and now director of the state Office of Charter Schools.

The Academy Foundation for Education has its own board and is recruiting board members, the first two of whom have significant experience in grantwriting and financial management.

“We wanted good solid business people that would be education-minded and want to serve the student population,” Moyer says. “You find your normal school board being parents who are interested.  But yet, they may not know of anybody that could have money to help with a foundation type of situation.”

Piedmont Community Charter School in Gastonia, which started in 2000 and now has about 570 students in kindergarten through 9th grade, was able to cobble together a consortium of four banks to provide a $1.95 million loan to purchase and renovate a 1914 Gaston County school building, says Courtney Madden, the school’s managing director.

Banks generally are reluctant to lend to charter schools because, like start-up businesses, they have little or no track record and because there is no guarantee their charters will be renewed, says Barbara Lawrence, Piedmont’s facilities planner.

But the four banks, by lending just shy of their individual risk thresholds of $500,000, were able to pool their loans, and students moved into the renovated building in October 2001.

It helped that the facility was an historical building, says Lawrence, and that school board members personally guaranteed the loans, showing their commitment to the school’s long-term success.

Orange Charter School in Hillsborough was also able to wrangle a bank loan, in part by operating its K-8 school out of a reasonably-priced church basement, allowing it to save enough money for a downpayment, says Chuck Nolan, principal.

And with a loan guarantee from the U.S. Department of Agriculture, through its rural development program, the school was able to secure a loan from Self-Help in Durham and moved its 180 students into a newly constructed building two years ago.

“We did it in a replicable way,” says Nolan.  “If other schools are in a decent rent situation, I could go in and show them how to do it in two four years.”

Chatham Charter School in Siler City launched a $1 million capital campaign last fall to build a gymnasium for its 275 students in kindergarten through 8th grade, says Larry Shurlds, head of school.

Because the school does not have a development office, parents and board members are taking on the fundraising responsibility.

And now that about 25 percent of the goal has been raised, Shurlds plans to make a larger push to current parents.

“We don’t have a problem doing these things,” he says. “But we strongly feel there should be some support for capital needs through the state.”

Part One: Charter school struggle to navigate obstacles.

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